Taking Action Now for An Increasingly Automated Future

The jobs created by automation will ultimately exceed those that are lost, but a federal program is needed to successfully navigate the transformation of the labor force.

By Jacob Everett, CEcD, Consultant - Site Selection & Incentives, McGuire Sponsel

Recently, Elon Musk announced plans for the Tesla Bot,1 a humanoid robot that stands 5 feet, 8 inches tall. Musk said the robot “probably won’t work.” I hope he is wrong.

Many people have an adverse reaction to discussions of automation and artificial intelligence. While I understand those fears, I believe we need to embrace automation. In fact, let’s put our foot on the gas — or set the autonomous electric vehicle at max speed. But as we accelerate toward automation, we must reposition our workforce for a successful journey.

Whatever the outcome, the Tesla Bot is simply the continuation of a process that began decades ago to create ever more sophisticated forms of automation. The pandemic only quickened this movement as companies turned to automation out of necessity (currently 500,000 manufacturing job openings are unfilled) and for strategic reasons (automation can be very attractive financially, especially in the current period of exploding demand).

Navigating the Transformation

While some taxation and public policy proposals aim at stopping or slowing the adoption of automation, myriad studies show such measures would be detrimental to the economy. The global economy is expected to struggle in the coming decade to keep up with demand driven by the baby-boom generation entering retirement, while still creating significant demand for goods and services combined with declining global birth rates — 2020 was the lowest rate on record in the U.S.

Some fears are not unfounded. People worry automation would create mass unemployment. One report estimates 36 million U.S. workers could face job losses due to automation.2 Most experts agree much of this change will occur in the next decade. However, these experts also agree that the global economy will be able to navigate this transformation.

A 2020 MIT Task Force on the Work of the Future report projected, “In the next two decades, industrialized countries will have more job openings than workers to fill them.” It further states, “History and economics show no intrinsic conflict among technological change, full employment, and rising earnings.”3

The review of significant work on this topic makes me optimistic about an automated future. I say, bring on the robots. I believe automation is an integral part of a growing global economy, and it has the potential to significantly improve the quality of life for millions of workers over the next decade. I also readily admit that this is going to be really hard.

Much of the research on this topic suggests we can predict a labor transition en masse rather than mass unemployment. In other words, automation will surely eliminate the need for millions of jobs, but job creation across the economy will exceed those losses. Globally,

tens of millions of workers will need to switch occupational categories and learn new skills in the coming decade.4 And it is this transition of workers — not technology, robots or fear — that deserves our attention.

Major labor disruptions conjure up visuals that are hard to ignore: thousands of workers leaving the production line for the last time, white-collar workers exiting an office building with their belongings in a box. These events are location-based and easy for media to cover — and difficult for public officials and government agencies to ignore. The displacement of millions of workers due to automation will likely occur each year with little publicity. The mass will be in the combined impact on individuals rather than the closure of any single facility.

The speed and sweeping nature at which workers will be forced to transition will create unique demands on the public systems supporting those affected. The labor force must be able to adapt as swiftly as the automation takeover. Slow or failed transitions are the prime threat to the economy during this period, which can lead to high unemployment and depressed earnings and demand.

The Need for Government to Step Up to the Challenge

Make no mistake: The robots are coming. Some of them are already here. Every day without action to retrain affected workers is a day the U.S. is falling behind. The federal government needs to create and implement an infrastructure to manage labor during the next two decades of change. Recent bills have been filed in the U.S. Senate (20195 and 20186) but have gone nowhere. These bills sought to expand the federal Trade Adjustment Assistance (TAA) program, which played a major role in supporting workers who were displaced by NAFTA.

A federal program is required to mount the massive effort needed to support workers during this reorganization of the global economy. Experts agree that modern systems and institutions are not up to the task. The pace of automation’s disruption to the labor market is expected to be two to three times that of previous periods of technological advancement.7 In addition, the automation of tasks will occur across geographies, industries (goods production, services, and everything in between) and occupations (white-collar and blue-collar, hourly and salary). This transition will be worldwide,

but no country is prepared. In fact, most countries in the Organization for Economic Co-operation and Development have been spending less on worker training and labor market transitions during the past 20 years.8 In the U.S., public spending in these two categories has not only declined but ranks at or near rock bottom. I recommend the federal government act immediately to meet AUTOMATION this challenge. Modifying TAA or developing a new system is bound has the to be a lengthy and difficult road. I suggest the federal government potential to create and fund a system that will partner with states and regions significantly to accomplish one very narrow goal: transition affected workers IMPROVE the into new, permanent positions with maximum speed. This will quality of life take significant federal investment. However, failure to address for MILLIONS this effectively will likely lead to a crippled economy. of WORKERS While this transition demands a federal response, nothing stands over the next in the way of states, regions, and cities taking independent action. Leading successfully in this area DECADE. will pay huge dividends as local labor markets position themselves for the future. Those leading states and communities will also be in position to maximize their impact once federal dollars and programs flow to address these needs. Collectively, we need to change the narrative on automation. This imminent shift represents great opportunity. It will require the best of American ingenuity and demand flexibility from each of us to learn new things and pursue new frontiers. Government must create a new infrastructure to manage this transition, companies must invest in their employees, and individuals must invest in their skills to adapt to a new world. As technology accelerates, so must we. The time to act is now. n 1 https://www.cnbc.com/2021/08/19/elon-musk-teases-tesla-bot-humanoid-robot-forrepetitive-tasks.html 2 https://www.brookings.edu/blog/the-avenue/2019/02/25/automation-and-ai-willdisrupt-the-american-labor-force-heres-how-we-can-protect-workers/ 3 https://workofthefuture.mit.edu/research-post/the-work-of-the-future-building-betterjobs-in-an-age-of-intelligent-machines/ 4 https://www.mckinsey.com/featured-insights/future-of-work/jobs-lost-jobs-gainedwhat-the-future-of-work-will-mean-for-jobs-skills-and-wages 5 https://www.congress.gov/bill/116th-congress/senate-bill/3034 6 https://www.congress.gov/bill/115th-congress/senate-bill/2982 7 https://www.bain.com/insights/labor-2030-the-collision-of-demographics-automationand-inequality/ 8 https://www.mckinsey.com/~/media/mckinsey/industries/public%20and%20social% 20sector/our%20insights/what%20the%20future%20of%20work%20will%20mean%20for% 20jobs%20skills%20and%20wages/mgi-jobs-lost-jobs-gained-executive-summarydecember-6-2017.pdf

MICHIGAN

Sets Strong Foundation for Workforce

As companies of all sizes around the world share the same challenge for finding, growing, and retaining highly skilled talent, Michigan is effectively positioning itself as home to one of the most talented, diverse, and abundant workforces in the country.

Michigan combines this broad range of qualified talent with an affordable cost of doing business, ranking in the top 10 nationally for STEM degree completions at its higher education institutions and first in the country for its concentration of engineering talent. As home to over a fifth of the nation’s manufacturing workforce, Michigan has a density and diversity of highly skilled talent.

“One of our major goals is to develop a talent pipeline that’s going to serve the state of Michigan and the world. I see the state of Michigan ranked in the top 10 for favorable business environments, and I think it’s really a remarkable time to be in Michigan and be a part of what’s happening,” says Dr. Samuel L. Stanley, Jr., President of Michigan State University.

Skilling and Reskilling Michigan’s Workforce

Over the years, the single-most pressing concern among companies of all sizes continues to be their ability to access and grow highly skilled talent. In recognizing that this nationwide problem will only continue to grow, Michigan is proactively addressing the impending talent shortage by investing in its workers and young people. nounced a $30 million scholarship initiative, Michigan Reconnect, for Michiganders 25 and older looking to complete an associate degree or a skill certificate program. In 2022, Governor Whitmer announced that 91,000 people have enrolled in the program.

The program is a part of Governor Whitmer’s Sixty by 30 goal which seeks to build a better Michigan by closing the skills gap, increasing opportunities, and making Michigan more competitive for inclusive economic growth. The goal — to increase the number of working-age adults with a skill certificate or college degree from 49 percent to 60 percent by 2030 — is aimed at creating opportunities for better jobs and bigger paychecks.

In response to the pandemic, the Futures for Frontliners state scholarship program was introduced in spring 2020 for Michiganders without college degrees who worked in essential industries. This scholarship provides frontline workers with tuition-free access to local community colleges to pursue an associate degree or a skills certificate, either full-time or part-time. Community colleges across the state are reporting a substantial uptick in enrollments for students over the age of 30, thanks in large part to these state programs covering most tuition costs for older students.

Building on these efforts, the Michigan Economic Development Corporation has convened a Talent Action Team to launch the first focused effort on talent in the electric vehicle and e-mobility industry sector. Working alongside a core set of employers, higher education stakeholders, and partners including MICHauto, the Talent Action Team is in the beginning

Courtesy of MEDC

Each day, Michigan fosters the growth and development of its talent pipeline, ensuring a strong foundation is set for its workforce.

stages of a process to promote a Michigan workforce of lifelong learners who meet the needs of employers, and which will inform workforce initiatives to proactively prepare the talent needed for automotive mobility and electrification for current, emerging, and future jobs and career pathways.

A Home Base for Remote Work

One of the unique advantages of running a business in Michigan is access to its talented and diverse workforce and state resources for hiring, training, and development. The pandemic may have benefited Michigan’s workforce, as more people have relocated from big cities, perhaps lured by the state’s natural beauty and lower cost of living. For example, the number of people who moved from the East and West coasts to Traverse City, Michigan, increased by 50 percent during July and August 2020, according to The Associated Press.1

Talent is seeking to work from places that maximize work-life balance, and increasingly finding that balance in Michigan. The commute-free lifestyle of remote work coupled with Michigan’s affordable cost of living — Michigan is the fourth most affordable state, with

One of the unique advantages of running a cost of living 10% lower than a business in Michigan the national average — frees up is access to its talented remote workers to enjoy more of what makes them happy. Throughand diverse workforce out the state, communities help and state resources for talent build their personal and professional networks. hiring, training, and development. In May 2022, project management platform Teamwork ranked Ann Arbor, Michigan, third in its list of best U.S. cities for remote workers,2 citing cost of living, average monthly salary, and recreational opportunities. Detroit and Grand Rapids also continue to rank among the top regions for housing affordability. “I think for dreamers, innovators, and entrepreneurs, Michigan affords the opportunity to dream bigger, build bigger, and to find many more folks who have that same mentality. Because here, there’s nothing, nothing, but opportunity,” says Dug Song, CEO of Duo Security. Each day, Michigan fosters the growth and development of its talent pipeline, ensuring a strong foundation is set for its workforce.

1 https://apnews.com/article/virus-outbreak-freedom-of-information-actmichigan-traverse-city-voting-2020-13e8288a2a915799489a6f88ef176d21 2 https://www.teamwork.com/blog/list-of-best-cities-for-remote-work/